Africa Energy farmed-out a 50% participating interest and transferred operatorship in Block 2B to Azinam Limited (“Azinam”). In consideration for the assignment of this interest, Azinam paid Africa Energy US$0.8 million at close, which includes reimbursement of costs incurred prior to close. In addition, Azinam will pay a disproportionate amount of the Gazania-1 exploration well costs and joint venture costs. To support the disproportionate funding obligation, Azinam paid a second US$1.5 million deposit to Africa Energy at close and is required to place the additional funds in escrow prior to signing a rig contract. Azinam is a private Southern Africa-focused oil and gas exploration company supported by Seapulse Ltd, a vehicle backed by Robert Friedland and Seacrest.
In addition, Africa Energy farmed-out a further 12.5% participating interest in Block 2B to Panoro Energy ASA (“Panoro”). In consideration for the assignment of this interest, subject to Azinam placing the required funds in escrow as noted above, Panoro will pay a disproportionate amount of the Gazania-1 exploration well costs. Panoro is an Africa-focused independent oil and gas exploration and production company listed on the Oslo Stock Exchange.
We achieved simultaneous close on these transactions which paves the way for the Gazania-1 exploration well to be spud in Block 2B by the end of 2021. The Gazania-1 well will be a drill up-dip of a previous oil discovery in Block 2B, with the well targeting 349 million barrels of oil (Best Estimate Gross Prospective Resources). Block 2B is regarded as having the potential to provide the first major oil production offshore South Africa and would be the first oil production in the Orange Basin South Africa.